The Bubble: Embrace or Run Away?

McAlvany Weekly Commentary

S&P 500: More Declines Than Advances Every Day In December China Adds 160,000 oz of Gold Send Questions To [e-mail] "We're at this moment where, again, credibility gets thrown out the window for the Fed. And I think that is the final stage of a bull market in metals, where your central bank credibility is lost and investors go scrambling in an effort to survive a loss of purchasing power. And I think in this case, you're also talking about ramifications that are well outside of any central bank's control, and that is geopolitical issues." —David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary. I'm Kevin Orrick, along with David McAlvany. Dave, before we start, let's just remind our listeners this is the last day to submit questions for our upcoming question and answer programs over the next two weeks. So those questions can be sent to: David: [e-mail]. Kevin: Yeah, [e-mail]. Well, I'll tell you what? This has been a great week. I feel like I lived a month through this week just because of your birthday. What an amazing celebration at your house, various nights. But I was very honored to be invited to meet some of the people that you knew back in college, Dave, relationships that you've kept going all these years. David: Well, actually we had friends that came into town and some of those relationships go back 50 years. So we covered every decade from when I was a wee small lad to still a truncated and underdeveloped wee small lad. I was a late bloomer, so it was about college before I actually added a little bit of height. So then the timeframe of developing college friends and then professional friends, and it was a phenomenal week. Kevin: Dave, it wouldn't surprise our listeners to know that the people who did fly in for your birthday, who you had affected earlier in life, [The Intentional] Legacy is the name of the book that you wrote about—just what we're all about. And I listened to your friends. Some of them I had heard about, but I had never met. And I listened to them each saying, "Hey, this is how you affected my life." And it was very poignant because I realized there's just been a lot to you all the way back. And at the end of the evening with these friends who had known you, well, one of them had known you since you were a child. He's a professional musician. And he pulled a guitar off the wall, very impromptu. He took the first two minutes to tune a very out-of-tune guitar—so it was very impromptu. But what he did was amazing to me. He sang the various stories that people had told throughout the night at the dinner table. He wrote a song and sang it. I could tell it truly was a gift, but talk about a poignant moment. That was completely unexpected, and I really had no idea somebody could do that. I mean, I don't think he forgot a single story. David: Yeah, it was very special. Family and friendship have played a central part in the last five decades, and I can't imagine the future much different than that. So spending time with friends from across the country, very special week. Kevin: Okay, so we're going to get into business here. This is the week of the Fed decision. And inflation hasn't gone away, Dave, and things feel awfully loose for loosening of the interest rate. What do you think? David: We are in a new world. People know who Jerome Powell is. There was a day when the Fed chief was anonymous. Nobody took the time. Nobody really cared. But this week is particularly important. The next Fed decision is here. The bond market's pricing in 97% probability of a 25 basis point cut, a quarter of a point. But the interesting trend remains that in spite of rate cuts dating back to September when this cycle started, interest rates like the 10-Year Treasury have been on the rise. So 3.63 on the 10-year was the yield then, in September, and reached a peak this week of 4.44. So 79, 81 basis points roughly,